{"id":16988,"date":"2026-11-04T15:48:08","date_gmt":"2026-11-04T15:48:08","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=16988"},"modified":"2026-11-04T15:48:10","modified_gmt":"2026-11-04T15:48:10","slug":"canadian-trade-surplus-widens-on-prices-as-new-u-s-tariffs-set-in","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/canadian-analysis\/data-flashes\/canadian-trade-surplus-widens-on-prices-as-new-u-s-tariffs-set-in\/","title":{"rendered":"Canadian trade surplus widens on prices as new U.S. tariffs set in"},"content":{"rendered":"\n
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The Bottom Line:<\/h4>\n\n\n\n

Canada’s trade surplus widened to $5.4B in September from $5.0B in August (revised up from $4.2B), marking the first full month since Section 338 tariffs took effect on August 22nd.<\/p>\n\n\n\n

Exports rose 0.2%, driven by volatile metal exports (+9.8%, mostly gold) and energy exports (+8.2%) from higher crude oil prices. But these gains were largely offset by declines across various non-energy products, including consumer goods (-7.1%) and electronic equipment and parts (-13.8%), partly reflecting a reversal in U.S. purchases of targeted exports following August’s rush to front-run tariffs. Excluding energy and metals, exports fell 5.6%. Export volumes fell 4% when stripping out price effects.<\/p>\n\n\n\n

Imports edged 0.3% lower, largely reflecting weaker motor vehicle and parts purchases due to unplanned supply disruptions in U.S. plants. This was moderated by continued spillover from the AI supply chain buildout into Canada-imports of electronic equipment and parts jumped a record 10.3%, mostly reflecting computer and peripherals (+29.4%), which includes processing units used in data centers.<\/p>\n\n\n\n

By our count, Canadian exports of products targeted with the new 50% tariffs were down 28% year-over-year<\/em> <\/strong>in September after rising 40% year-over-year in August1<\/a><\/sup>. The estimated average effective tariff rate for Canadian exports to the U.S. ticked up to 4.2% from 3.2% in August, reflecting the impact of the new tariffs \u2013 now above some other major U.S. international trade partners (notably Mexico\u2019s 3.2% rate) but still below the 6.5% average rate on all U.S. imports, and over 82% of Canadian exports continued to cross the border duty free in September.<\/p>\n\n\n\n

While the monthly data is highly volatile and revision prone, we estimate a net add of around a percentage point to Q3 GDP growth \u2013 broadly consistent with our own projection for an annualized 1.8% increase in Q3 GDP.<\/p>\n\n\n\n

Looking ahead, the reshuffling of products targeted by U.S. tariffs in both mid-September and late October did not materially change the share (~5%) of total U.S. import from Canada affected by the new measures. While product bans for a subset of dairy, alcohol, and motorcycle products went into effect on September 29th<\/sup>, there was already a prohibitive 50% tariff applied to some of these goods, so the marginal impact of the ban on the macroeconomic growth backdrop is likely relatively small.<\/p>\n\n\n\n

That being said, we continue to expect significant disruption in targeted sectors, but with more than 80% of Canadian exports maintaining duty-free access under CUSMA, spillover to the broader economy should remain limited.<\/p>\n\n\n\n

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The details:<\/h4>\n\n\n\n